Environmental Policy

Report on Auto-Related Environmental Taxes

- Utilization of Auto-Related Taxes in Environmental Policy -

July 1999
Panel of Experts on Auto-Related Environmental Taxes


With the increases in the number of automobiles and driving distances, vehicles are imposing ever-greater pressure on the environment in the forms of air pollution and global warming.

Various environmental protection measures related to vehicles have been employed till today. Among them are regulations on exhaust gases and fuel efficiency, a total volume reduction plan based on the Law concerning Special Measures for Total Emission Reduction of Nitrogen Oxides from Automobiles in Specified Areas (the Automobile NOx Law), and various projects carried out to solve traffic congestion. In addition to these measures, it is hoped that economic instruments be promoted extensively so that environmental problems arising from vehicle use may effectively be solved by market mechanisms. Here economic instruments are encouraged because auto-related environmental problems are caused by socioeconomic activities, including business operations and people's daily activities.

Since March 1999, this Panel has held six meetings to study what kind of auto-related taxation scheme is desirable from the point of view of environmental protection, particularly in coping with air pollution and global warming problems. The focus of our study was mainly the re-examination of the current tax system. During this time, the panel held hearings on the topic from four organizations specializing in this field, which were very informative.

This report is the outcome of our study. We hope that people take this opportunity for intensive discussion and re-examination of today's auto-related taxation from the point of view of environmental protection, and that the central government will actually implement these ideas in concrete measures.


The Panel of Experts on Auto-Related Environmental Taxes

(members listed in alphabetical order)

KASHIMA Shigeru Professor, Faculty of Science and Engineering, Chuo University
NAKASATO Minoru Professor, Faculty of Law, University of Tokyo
SAWA Takamitsu
(Panel Chairperson)
Director, Research Institute of Economy, Kyoto University
SUGIYAMA Masahiro Professor, Faculty of Commercial Science, Waseda University
YASUHARA Tadashi Special Advisor, Sakura Research Institute